A306 Chapters 8-10 SB

Risks of not knowing in advance how much labor time will be needed throughout the budget period includes (select all that apply) 1. Labor Shortages 2. Erratic Layoffs 3. Excessive Inventory Levels 4. Low Employee Morale

Labor Shortages, Erratic Layoffs, Low Employee Morale

Possible causes of a spending variance include (select all that apply): 1. Producing more or less product than expected 2. Changes in technology 3. Paying less than expected for inputs 4. Using too many inputs for the actual level of activity

Changes in technology Paying less than expected for inputs Using too many inputs for the actual level of activity

Using budgeting assumptions when preparing the master budget: 1. Increases the complexity of the process 2. Involves adjusting data inputs within each master budget schedule 3. Makes it easier to answer "what-if" questions

Makes it easier to answer "what-if" questions

Revenue Variances can be caused by (select all that apply): 1. Poor accounting controls 2. Changes in the mix of products sold 3. Changes in selling price 4. Changes in level of activity

Poor accounting controls Changes in the mix of products sold Changes in selling price

The difference between the actual price paid for the material and what should have been paid according to the standard is reflected in the direct materials _____ variance

Price

The cash budget uses information from several other budgets. Which of the following budgets is NOT used to prepare the cash budget? 1. Direct labor 2. Selling and administrative 3. Production 4. Sales

Production

Which of the following budgets are directly based on information from the sales budget? (select all that apply) 1. Direct Materials Budget 2. Direct Labor Budget 3. Production Budget 4. S&A budget

Production budget S&A budget

To understand why actual net operating income differs from what it should have been at the actual level of activity, the ______ variances should be analyzed. 1. Activity 2. Revenue and spending 3. Both revenue and spending and activity

Revenue and spending

Budgeted expenses for areas other than manufacturing are shown on the _____ budget 1. Selling and Administrative 2. Ending Finished Goods Inventory 3. Manufacturing Overhead 4. Cash

Selling and Administrative

Which statement regarding variable overhead variance analysis is true? 1. Efficient use of VOH results in a favorable VOH efficiency variance 2. VOH variances are easy to interpret 3. The VOH efficiency variance uses exactly the same inputs as the direct labor efficiency variance 4. The VOH efficiency variance may depend on the efficiency of direct labor

The VOH efficiency variance may depend on the efficiency of direct labor

A favorable activity variance may not indicate good performance because a favorable activity variance ______. 1. For a fixed cost will occur simply because the actual level of activity is less than the budgeted level of activity 2. May occur simply because the purchasing department acquired low quality supplies at a discount 3. For a variable cost will occur simply because the actual level of activity is less than the budgeted level of activity

For a variable cost will occur simply because the actual level of activity is less than the budgeted level of activity